The US Supreme Court has delivered a decisive blow to Alaska’s efforts to resurrect the controversial Pebble mine project, which faced staunch opposition due to environmental concerns. The project, poised to become North America’s largest copper, gold, and molybdenum extraction site, has been mired in controversy for nearly two decades.
In January 2023, the Environmental Protection Agency (EPA) sided with environmental groups by preventing Northern Dynasty Minerals (TSX: NDM; NYSE: NAK), the project’s owner, from storing mine waste in the Bristol Bay watershed. This area is home to the world’s largest sockeye salmon fisheries, and concerns about potential ecological devastation led to widespread opposition to the project.
Supporters of the Pebble mine project, including Alaskan lawmakers, filed a motion in July, urging the Supreme Court to overturn the EPA’s decision. They argued that the nation’s highest court should address the matter directly, bypassing lower court proceedings.
In a departure from the usual legal process, where cases must begin in lower courts before reaching the Supreme Court, Alaska sought a more expedited resolution. However, the Supreme Court chose to deny Alaska’s request.
Steve Vladeck, a Supreme Court analyst and professor at the University of Texas School of Law, commented on the decision, stating, “Although there’s no explanation accompanying today’s denial, it stands to reason that a majority of the justices disagreed and were willing to let the case go through ordinary litigation in the lower courts first.”
Despite this setback, Northern Dynasty Minerals remains committed to the Pebble project’s future. The company is exploring legal avenues to challenge the EPA’s decision and underscored the potential benefits of the project for Alaska. The proposed mine could offer substantial year-round employment opportunities for thousands of Alaskans.
In a statement issued on Monday, Northern Dynasty stated, “While it is a disappointing decision, it is important to note that this is not a comment on the arguments put forward by the state. We have long stated our belief that the EPA has acted outside of its regulatory authority, and that remains our position today.”
Over a projected 20-year mine life, the Pebble mine is expected to yield substantial quantities of copper, gold, molybdenum, silver, and rhenium, with a post-tax net present value (NPV) exceeding $2 billion and an internal rate of return (IRR) of approximately 15%.
The news of the Supreme Court’s decision had a significant impact on Northern Dynasty’s stock, which dropped by 26.9% following the announcement. The Vancouver-based miner currently holds a market capitalization of C$204.9 million ($153 million).
